BILL NUMBER: SB 1500	CHAPTERED  09/01/00

	CHAPTER   280
	FILED WITH SECRETARY OF STATE   SEPTEMBER 1, 2000
	APPROVED BY GOVERNOR   AUGUST 31, 2000
	PASSED THE ASSEMBLY   AUGUST 18, 2000
	PASSED THE SENATE   MAY 24, 2000
	AMENDED IN SENATE   MAY 2, 2000
	AMENDED IN SENATE   MARCH 28, 2000

INTRODUCED BY   Senator Burton

                        FEBRUARY 15, 2000

   An act to amend Section 790.06 of the Insurance Code, relating to
insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1500, Burton.  Insurers: unfair practices.
   Existing law provides for the licensing and regulation of insurers
by the Insurance Commissioner.  Existing law prohibits various
unfair methods of competition and unfair or deceptive acts or
practices in the business of insurance, allows the commissioner to
issue and serve upon any person engaging in that business an order to
show cause in that regard, and provides certain judicial remedies,
as specified.
   This bill would require the order to show cause to specify the
reason why the method of competition is alleged to be unfair or the
act or practice is alleged to be unfair or deceptive.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 790.06 of the Insurance Code is amended to
read:
   790.06.  (a) Whenever the commissioner shall have reason to
believe that any person engaged in the business of insurance is
engaging in this state in any method of competition or in any act or
practice in the conduct of the business that is not defined in
Section 790.03, and that the method is unfair or that the act or
practice is unfair or deceptive and that a proceeding by him or her
in respect thereto would be in the interest of the public, he or she
may issue and serve upon that person an order to show cause
containing a statement of the methods, acts or practices alleged to
be unfair or deceptive and a notice of hearing thereon to be held at
a time and place fixed therein, which shall not be less than 30 days
after the service thereof, for the purpose of determining whether the
alleged methods, acts or practices or any of them should be declared
to be unfair or deceptive within the meaning of this article.  The
order shall specify the reason why the method of competition is
alleged to be unfair or the act or practice is alleged to be unfair
or deceptive.
   The hearings provided by this section shall be conducted in
accordance with the Administrative Procedure Act (Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code) and the commissioner shall have all the powers
granted therein.  If the alleged methods, acts, or practices or any
of them are found to be unfair or deceptive within the meaning of
this article the commissioner shall issue and service upon that
person his or her written report so declaring.
   (b) If the report charges a violation of this article and if the
method of competition, act or practice has not been discontinued, the
commissioner may, through the Attorney General of this state, at any
time after 30 days after the service of the report cause a petition
to be filed in the superior court of this state within the county
wherein the person resides or has his or her principal place of
business, to enjoin and restrain the person from engaging in the
method, act or practice.  The court shall have jurisdiction of the
proceeding and shall have power to make and enter appropriate orders
in connection therewith and to issue any writs as are ancillary to
its jurisdiction or are necessary in its judgment to prevent injury
to the public pendente lite.
   (c) A transcript of the proceedings before the commissioner,
including all evidence taken and the report and findings shall be
filed with the petition.  If either party shall apply to the court
for leave to adduce additional evidence and shall show, to the
satisfaction of the court, that the additional evidence is material
and there were reasonable grounds for the failure to adduce the
evidence in the proceeding before the commissioner, the court may
order the additional evidence to be taken before the commissioner and
to be adduced upon the hearing in the manner and upon the terms and
conditions as to the court may seem proper.  The commissioner may
modify his or her findings of fact or make new findings by reason of
the additional evidence so taken, and shall file modified or new
findings with the return of the additional evidence.
   (d) If the court finds that the method of competition complained
of is unfair or that the act or practice complained of is unfair or
deceptive, that the proceeding by the commissioner with respect
thereto is to the interest of the public and that the findings of the
commissioner are supported by the weight of the evidence, it shall
issue its order enjoining and restraining the continuance of the
method of competition, act or practice.
